Protect Patient Access and Reduce the Cost of Care: Bipartisan Support for ASC Payment Reform

Late in 2016, as part of the 21st Century Cures Act, the U.S. Congress approved two pieces of legislation that are important to ASCs and ASC physicians. The first exempts ASC patient encounters from counting toward physicians’ meaningful use quotas, and the second requires the federal government to publicly post ASC and hospital outpatient department (HOPD) rates in a way that allows patients to make quick comparisons. While we continue to appreciate the congressional support ASCs and ASC physicians received in both of these areas, the work ASCs need to do on Capitol Hill is far from over.

As recently as 2003, Medicare reimbursed ASCs at an average of 86 percent of the amount it paid to HOPDs for the same procedures. Today, on average, ASC payments are less than 50 percent of the HOPD rates. At the root of the problem are several Medicare policies that reward HOPDs, the higher cost provider, over ASCs, the lower cost provider.

One of those policies, as ASCA has pointed out before, is the formula used to adjust ASC and HOPD payments for inflation each year. ASCs are updated each year based on the Consumer Price Index for All Urban Consumers (CPI-U), a number derived using a formula that measures the cost of commodities like milk, eggs and gasoline.

HOPD rates, on the other hand, are updated each year based on the “hospital market basket.” Not surprisingly, that number, which measures the rising cost of medical goods and services, has historically resulted in substantially higher reimbursement rates for HOPDs.

Hospitals need to be reimbursed for the many essential services they provide, but the continuing growth in the disparity between Medicare’s HOPD and ASC payments must stop.

To remedy this growing inequity, ASCA is backing new legislation that would require Medicare to update ASC payments based on the more appropriate hospital market basket. To read more about that bill introduced March 30, 2017, by U.S. Representatives Devin Nunes (R-CA) and John Larson (D-CT), go to ASCA’s web site(www.ascassociation.org/ascqaa2017).

While several of the provisions in this legislation are similar to those included in the ASC Quality and Access Act of 2015, that legislation died at the conclusion of the last session of congress and new legislation was needed.

The new bill ASCA is backing also would create greater transparency in the Medicare quality reporting program for both ASCs and HOPDs by requiring the Centers for Medicare & Medicaid Services (CMS), where applicable, to post online, side-by-side comparison reports from both sites of service.

It also would add an ASC representative to the Advisory Panel on Hospital Outpatient Payment. Since decisions made by that panel impact ASC facility fees and the procedures that Medicare will allow ASCs to perform, it is only fair that ASCs have a voice in the decisions made there.

Finally, this bill would require CMS to disclose exactly which criteria are involved when a decision is made not to add a new procedure to the list of procedures that Medicare will reimburse ASCs for providing. Under current policy, CMS can exclude a procedure from this list because of a general concern for up to six criteria but is not required to disclose exactly which of the criteria trigger the exclusion. This process makes it difficult for ASCs to marshal the data needed to respond to any concerns that CMS may have and slows the advance of new procedures to this lower cost site of care.

As Democrats and Republicans continue to face off in the national debate regarding the repeal and replacement of Obamacare and the many other areas of concern that are inherent in our complicated web of national health care policy, these proposals demonstrate that there are still plenty of health care reforms that can and should be implemented with bipartisan support.

Rebecca Craig is president of the Ambulatory Surgery Center Association.

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